According to the news report by Bloomberg, OPEC’s oil policy meeting may actually be taking place at the G20 Summit scheduled to take place a week before the official cartel meeting on December 6 in Vienna.
Days before the oil cartel meets to decide on oil policies, key decision makers of OPEC will be present at the G20 Summit that is scheduled to take place in Buenos Aires, Argentina at the end of this month. In fact, the expectation is that the OPEC leaders may have a meeting on the sidelines instead of waiting for their own summit a week later.
The Saudi Arabian Crown Prince Mohammed bin Salman as well as the Russian President Vladimir Putin, leaders of the two largest oil producers in the world, plan to attend the G20 Summit in Argentina this year. The two leaders have been working together in managing the international oil market for the last two years.
Another key player in the oil market, US President Donald Trump will also be attending the G20 Summit. He has, on many occasions, made his opposition to the OPEC clear.
According to the president of the Washington based consulting firm Rapidan Energy Advisors LLC and former White House official, Bob McNally, the expectation is that President Trump will meet with President Putin and Crown Prince Mohammed bin Salman to discuss the optimal price range for oil during this Summit.
Speculation is rife that the Crown Prince of Saudi Arabia (MBS, as he is known) will not be able deny President Trump’s demand for lower oil prices, especially after the American president supported him after the controversial killing of the Washington Post journalist Jamal Khashoggi.
Energy Aspects Ltd.’s chief oil analyst Amrita Sen stated that the market is currently assuming that MBS will not be able to hold their ground against Trump.
The energy ministers of Saudi Arabia and Russia, Khalid Al-Falih and Alexander Novak, are also expected to be present at the G20 Summit. However, these plans have not been made public yet and this information was sourced from insider sources that did not wish to be named.
The possibility of the oil ministers and heads of state being present at the Summit have led the market to expect some kind of a deal being made between prior to the OPEC meeting. This won’t be the first time that the two oil majors have used the G20 platform to take decisions on oil policy.
In early September in 2016, during the G20 Summit that took place in Hangzhou, China, Putin and MBS had met to discuss how oil prices could be revived. Just a few hours after they met, their respective oil ministers held a joint press conference. Then, a few days later, the two countries’ leaders announced that OPEC as well as its non-member allies would be cutting down oil production.
This meeting in Buenos Aires is taking place after there has been a week of almost-panic in the oil market. The global crude oil benchmark, Brent, had nosedived 6.1% to a 12-month low of $58.80 per barrel. The benchmark is down by 22% for this month due to concerns that there is once again an oil glut in the global market.
While Trump is celebrating the drop in international oil prices and asking for them to drop even lower, oil-diplomacy is now clouded by the killing of Khashoggi. Despite the fact that there are clear indications that MBS was behind the journalist’s killing, Trump has declared that this would not impact the White House’s relations with Saudi Arabia.